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Industrial output up in October, but near-term outlook is gloomy
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WASHINGTON - Industrial output posted a bigger-than-expected rebound in October after plunging in September by the largest amount in more than 60 years.
The Federal Reserve said Monday that industrial output rose 1.3 percent last month, reflecting a return to more normal operations after hurricanes and a strike at Boeing Co. the previous month.
Those disruptions, along with the weak economy, caused industrial production to fall by 3.7 percent in September, the biggest one-month drop since a 5 percent plunge in February 1946.
The 1.3 percent increase in October was bigger than the 0.2 percent rise that economists expected, but the September decline was worse than the 2.8 percent drop originally reported.
Analysts said the outlook for the industrial sector remained gloomy, given that they think the United States has tumbled into what could be a prolonged recession.
Nigel Gault, chief U.S. economist at IHS Global Insight, said he believed industrial production for all of 2009 will drop by 3.5 percent, which would be the worst performance since the recession year of 1982.
"Do not be fooled by the sharp headline increase in industrial production," he said. "Consumer demand is falling rapidly and the export cushion is disappearing."
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